Friday, July 20, 2012

Carwyn Jones is...wouldn't you be?

Chuffed. When Carwyn Jones, Wales' first minister uses words like ''incredibly important'', ''catch-up'', ''set the pace'', overtake'', ''attract...high value, high growth companies'' these are clear evidence of a state of high chuffedness. He says that the deal for fast broadband with BDUK will 'transform the broadband landscape across Wales'. Fibre optic cables are to be laid and 96% of the population will have access to 80Mbps through it. Nearly half of the £425m cost will be born by taxpayers: Welsh Govt £58m; UK Govt (BDUK) £57m; Europe £90m. BT are contributing £220m.

McKinsey published in May 2011 Internet Matters a report on the internet as a vast economic catalyst to boost growth. What is about to happen in Wales should hopefully be rolled out all over the UK. But the dreaded funding headache presumably means it will stall, take years or never happen in some areas leaving rural blight and pressure on cities.

One principle in monetary economics is that money creation used for productive purposes is not inflationary. It is therefore possible to finance the Broadband Initiative with the creation of government money, without anyone incurring any costs or debts, and without any interest burden.